Work with ratings agencies, investors and analysts

With the easing of geopolitical tensions and restoration of trust in the Russian economy among international investors in 2016, Standard & Poor’s and Fitch revised their outlook on the sovereign credit rating of the Russian Federation from ‘negative’ to ‘stable’. In accordance with the methodology of the agencies, the change in the sovereign rating automatically triggered similar actions for the ratings of a number of quasi-sovereign Russian issuers, including Russian Railways.

As of the end of the year, the rating of Russian Railways corresponded to the rating of the Russian Federation and stood at BB+/Ba1/BBB– from Standard & Poor’s, Moody’s and Fitch, respectively, with a ‘stable’ outlook from Standard & Poor’s and Fitch and a ‘negative’ outlook from Moody’s. In their reports, the agencies once again provided a positive assessment of the quality of work of Russian Railways based on the management of the loan portfolio structure and noted the long repayment terms, moderate debt burden, stable financial indicators as well as sustainable access to debt capital, including foreign capital.

Credit ratings of the Russian Federation and Russian Railways as of the end of 2016

Issuer

Agency

Rating

Outlook

Russian Federation

Standard & Poor’s

BB+

Stable

Moody’s

Ba1

Negative

Fitch

BBB–

Stable

Russian Railways

Standard & Poor’s

BB+

Stable

Moody’s

Ba1

Negative

Fitch

BBB–

Stable

In 2016, Russian Railways continued a bilateral dialogue with Russian and foreign financial investors both in the format of bilateral meetings as well as at industry-based conferences. The central event was the Company’s road show in September devoted to its return to the international capital market with the first Eurobond placement in two years. In addition, a traditional annual corporate investor’s day was held in London in December 2016